Saturday, August 28, 2010

Editorial of People's Journal. It's obvious that they are talking about our fave bad MNC, Nestle.

The buck stops herePDFPrintE-mail
Wednesday, 25 August 2010 18:55
There are numerous instances when erring employees make appalling decisions that put the reputation of the entire company in jeopardy.

Even worse, there are instances when embezzlement or fraud is committed while serving in an official capacity.

During times like these, it would be so easy for a company to put the entire blame on the erring employee.

But those who value “relationships more than contracts” — as the world’s greatest investor, Warren Buffet, put it — take command responsibility and find ways to rectify the situation.

Often, this comes at their own expense, but the welfare of their customers and business partners comes first.

There is actually a legal principle which applies to situations such as these, namely the rule of “apparent authority.” Apparent authority states that a principal is responsible for the acts of an agent where the principal, by his words or conduct, suggests to a third person that the agent may act on the principal’s behalf, and where the third person believes in the authority of the agent (for instance, by virtue of a high-ranking position, long employment history, and representations such as official calling cards, letterheads, etc.)

On the other hand, there are other firms that refuse to acknowledge this doctrine, and continue to avoid accountability at all costs.

One such corporation, a giant multinational engaged in food and beverage products, has gained notoriety in the business community.

It finally reached a point wherein the country’s largest bank eventually sued the MNC for its passive involvement in a billion-peso scam.

Unlike other cases where victims were not financially crippled by acts of fraud, the scheme perpetrated by the multinational’s regional sales manager left several of their Central Luzon distributors entirely bankrupt. Indeed, entire families found themselves mired in insurmountable debt.

Conceitedly, the company has absolved itself of all blame, notwithstanding the fact that management was fully aware of the problem yet still urged banks to lend money to the Central Luzon distributors (thus the lawsuit).

More disturbingly, a very similar case occurred not too long ago, wherein another one of their sales managers ran away with approximately P100 million and left the distributor holding the bag.

Let us recall that one of the cornerstones of President Aquino’s economic agenda is to boost the growth of small and medium enterprises and promote entrepreneurship.

Accordingly, companies need to be reminded that the buck does not always stop before it reaches them.

Friday, August 27, 2010

Bad MNC strikes again! by Ducky Paredes

HOW do you protect yourself from fraud and devious financial schemes if, in spite of all the sworn documents they signed, the presumably respectable parties to whom you had extended a series of loans, deliberately deceive you?

This is a lesson in doing business with entities larger than yourself or your company. What you will read about is a clear case of duplicity, prevarication and unethical conduct by an MNC and its regional sales manager.

The complainant is a leading Philippine bank that extended hundreds of millions in various loans and credit facilities to a local firm, Interbrand Logistics and Distribution, Inc., a top distributor of the MNC. The respondents include the MNC that produces and markets a wide range of food and beverage products. It operates on a global scale, with 2009 sales running above $100 billion.

The bank granted the loans after satisfying itself about the borrower’s credit worthiness and the viability of its business as exclusive distributor of the MNC’s products in Quezon City, Tarlac and Bulacan. The bank checked with the MNC and was advised that indeed, the borrower was "one of its top distributors in the country; that it meets its sales targets; and that its payment record is satisfactory."

Due to this favorable endorsement, the bank granted Interbrand in May 2006 credit facilities of P80 million and a Bills Purchase Line of P10 million. Interbrand availed of this facility in various amounts starting July 2006. It signed a Facility Agreement and issued promissory notes to the bank, to be redeemed upon maturity. It backed up its promise to pay by executing, in favor of the bank, a chattel mortgage over its merchandise inventories.

To further secure the prompt observance of the terms of the agreement, the President/Chief Executive Officer and a director of Interbrand also executed a Continuing Suretyship to answer for the loans.

The credit facility was renewed from year to year, after the bank had reviewed and reassessed the performance of the borrower. As part of due diligence, and prior to renewal, the bank always checked with the MNC about the financial status of Interbrand, and each time, the MNC would give a favorable endorsement.

The bank also conducted random checks with the MNC in between renewals to monitor the borrower’s creditworthiness and its status as distributor. One such random inquiry was made in June 2009. In its complaint, the bank claims that in reply, the MNC’s Head of Distribution Management told the bank that Interbrand remained as its No. 1 distributor in the Philippines. Even when MNC knew that this was no longer the case.

Another trade check was made on the borrower in September 2009 when its credit facility again came up for renewal. Reportedly, the MNC once more gave the usual positive assessment.

These favorable endorsements led the bank to renew Interbrand’s credit facility, allowing the latter to secure a series of 19 loans totaling P123.25 million in the second half of 2009. On January 13 of this year, Interbrand availed of still another loan, amounting to P6 million, backing this up with another promissory note.

But just two days after getting this latest loan, Interbrand defaulted on a P5.3 million borrowing that was due on January 15, 2009. Reminders and demands for payments were given to the borrower but it failed to settle its accountabilities.

In the course of its investigation, the bank discovered what appears to be a horror story, with both Interbrand and the bank ending up terribly scarred – financially and otherwise.

It turns out that the MNC, through its Regional Sales Manager (ASM), had been pulling out inventory from Interbrand’s warehouse. These were then delivered to some of the MNC’s key accounts that were urgently asking for additional product deliveries. In exchange, the ASM would issue credit memos that Interbrand could use, in lieu of cash, to purchase MNC products.

On various dates in May 2009, the multinational company, through its ASM, pulled out some P114 million worth of products from Interbrand’s warehouse. However, the ASM only issued P58 million worth of credit memos. The balance of P56 million was left unsecured.

When Interbrand tried to use the P58 million in credit memos to pay for the purchase of MNC products, the MNC refused to honor these, claiming that the credit memos were forgeries. It also denied having pulled out the P56 million worth of products not covered by the credit memos.

Oddly enough, the MNC reportedly acknowledged during a meeting with the bank that its ASM had, in fact, issued the P58 million in credit memos to Interbrand but it claimed that these were forgeries and were unauthorized.

Confronted about the false information he provided, MNC’s Head of Distribution Management allegedly told the bank that the company prohibits them from disclosing such information about its distributors.

Clearly, a trusting Interbrand is the victim of a huge scam. It was played for a fool by the MNC and its ASM. The trusting bank was also misled into thinking that everything was hunky-dory even when the MNC already knew that its ASM was a crook.

Interbrand went belly up because of the MNC’s collusion with its crooked ASM. Of course, this does not absolve Interbrand of responsibility over its unpaid accounts. According to the bank, Interbrand became aware of its money troubles as early as mid-2009, yet it knowingly failed to advise its creditor of its dire financial status. And it continued to avail of the credit facility, although it knew that it no longer had the capability to pay the loans.

In its complaint, the bank said Interbrand and its officials, as well as the MNC, deliberately concealed information vital to the decision about the credit facility to protect their own business interests. It said the defendants "acted in utmost bad faith and in wanton, fraudulent, reckless, oppressive and malevolent manner."

The bank also accused the MNC of having "knowingly made a false representation with intent to mislead the Bank into renewing Interbrand’s credit facilities and allowing Interbrand to make further availments under the same to finance the purchase of (its) products which would eventually lead to (its) benefit."

It asked the court to order Interbrand, its four officials and the MNC, to pay the bank P109.792 million in damages as of March 22, 2010 plus interests, penalties and other charges; at least P1 million in exemplary damages; more than P28.448 million in attorney’s fees and litigation expenses; and from Interbrand and its four officials, P30,497.85 in liquidated damages as of March 22, 2010.

Hopefully, Interbrand, as primary victim, has also sued MNC for all it is worth!

Readers who missed a column can access This is updated daily. Your reactions are welcome at

Thursday, August 26, 2010

Go DTI! Cheers to Director Subido!

Man in the Mirror
FROM THE STANDS By Domini M. Torrevillas (The Philippine Star) Updated August 19,

Ten days from now, Michael Jackson — the often misunderstood, yet ultimately revered King of Pop — would have turned 52 years old. While I am nowhere near being a die-hard MJ fanatic, I admit that I always found his music unique and awe-inspiring. Add his talented songwriting to his otherworldly dance moves, singular vocals, and the most technically-magnificent stage productions ever made, and one can easily argue that Jackson was the most influential entertainer of the 20th century.

Personally, I am more inclined towards (and familiar with) his classic Motown work with the Jackson Five, as well as earlier albums like “Got to Be There” (1972) and “Off the Wall” (1979). One truly interesting Michael Jackson song, however (and many sources claim that it was the artist’s best-loved work as well), is the relatively recent hit “Man in the Mirror”. Straying from his usual dance-inducing funk, this poignant song was first released as a single in early 1988, off his seventh solo album “Bad”. Owing largely to its powerful message, it has become one of Jackson’s most critically acclaimed songs. Whether in times of difficulty or transition — as our country is undergoing right now — Man in the Mirror’s refrain offers a stirring perspective on how we can best move forward, individually and as a nation:

I’m starting with the man in the mirror

I’m asking him to change his ways

And no message could have been any clearer:

If you want to make the world a better place

Take a look at yourself and then make the change

Undoubtedly, we are experiencing a renewed air of hope brought about by P-Noy’s uncontested victory and the seamless turnover of power. Many of those who were around to witness the EDSA People Power Revolution have drawn positive comparisons between the sentiments then and the sentiments now. Our social consciousness — apathetic at best, thanks to a lifetime of being desensitized by acts of daily corruption — now banks on the promise that this corruption can finally be eradicated.

Given this overwhelmingly positive outlook, the challenge for every Juan dela Cruz is to avoid turning into Juan Tamad, passively waiting for the guava to fall into his mouth. If the promises delivered during the most recent Presidential inauguration and State of the Nation Address have inspired us, we must remember that we each have a role in fulfilling them. While it is true that vision, leadership, and implementation begins from the top, accomplishing all of these ideals is a collective responsibility. If you want to make the world a better place, take a look at yourself and then make the change.

Consider a taxi driver from Tagbilaran City named Iluminado Boc, who returned $17,000 (more than four years worth of his earnings) that was left behind by a passenger. The irony of this situation is that if he had been corrupt, he would no longer be mahirap. But most likely, he looked at his rearview mirror, saw his reflection, and decided that his integrity did not have a dollar equivalent.

Then there is the case of DTI Legal Director Benjamin Subido, who drew the ire of a large multinational corporation engaged in food manufacturing and distribution, for apparently doing his job too efficiently. In line with P-Noy and DTI Secretary Greg Domingo’s mandate to streamline bureaucratic procedures, eliminate red tape, and expedite paperwork, Director Subido acted swiftly on a complaint filed against the MNC. Allegedly, the company had already made arrangements to ensure that this complaint would never see the light of day, so it filed a Motion to Inhibit Subido from the case. Undaunted, Subido pressed on and the company’s Motion was eventually denied.

While these may be exceptional examples of honesty and courage, our daily lives give us enough opportunities to create a ripple effect of optimism. Indeed, the so-called little things — obeying traffic rules, refusing to buy pirated DVDs or illegally downloading content, being on time for all appointments — amount to a lot. As the King of Pop himself says: no message could have been any clearer.

Wednesday, August 25, 2010


Clash of the Titans

WHAT happens when two “titans”—one of the country’s biggest banks and the other a multinational consumer goods giant—collide? The business community is sitting back to watch the potential fireworks explode.

News about this has been kept to a minimum, but the implications of this skirmish have been dominating coffee shop buzz for weeks now (if you’ve been following Biz Buzz, this issue initially surfaced a few months ago). The bank has included the multinational giant as co-defendant in a P170-million suit.

It seems that the multinational giant had some trouble a while back in Central Luzon, when its regional sales manager (coupled with the multinational’s own carelessness and neglect) was able to scam its area distributors a total amount estimated at close to a billion pesos.

Instead of reporting this to its stakeholders (especially creditor banks), the multinational reportedly chose to keep the entire thing strictly hush-hush. In the meantime, the company continued to provide glowing reviews and endorsements for its cash-strapped Central Luzon distributors to enable them to secure loans. As a result of this false representation, banks continued lending the distributors.

Predictably, this cycle eventually crashed. In its wake were left numerous bankrupt distributors and banks holding the bag. One particular bank conducted its own investigation and learned that the very root of the problem was the multinational’s business practices.

Odds are in favor of the bank as sources point out that it has extraordinary leverage against the multinational: the bank just happens to be owned by the country’s biggest retail operation and can therefore lock out the multinational’s products from all its shelves. Daxim L. Lucas

Wednesday, July 21, 2010

Milo Marathon 2010: Nestle's Audacity to Skirt Responsibility: What's New?

The incident of Remus Fuentes' passing 48 hours after the Milo Marathon was never covered by Media. Insiders in the industry have acknowledged that this will never see the light of day, especially that Nestle, again, is involved. They always use their big advertising budget to squash any unfavorable news about them, threatening pull out of ads should any media outfit publish things such as this.

If you still haven't heard of this, here are the links to both sides of the story.

Remus's Father:

Nestle's Statement:

You can judge for yourself who is telling the truth when you go through the posts. It is also very interesting to take a look at the comments of the people. Nestle thinks it can get away with generic pronouncements, half-truths, outright lying, and yes, even putting the actual blame on Remus by referencing lack of preparation as a big risk factor!

What assholes!!! An eight year old is fatherless now because of Nestle's idiocy! And now, Nestle has the gall to say that they did everything by the book and actually try to state that a tragedy like this is the runner's fault!

Mr. Rudy Fuentes, we support you! Nestle has a history of evading responsibility by using their size, power and money. There are several entities now who have filed cases against them. The biggest one is Banco de Oro. (I will be posting the copy of the case here soon.)

You are alone in this fight. You are not alone in seeking the truth. You are not alone in seeking justice.

They will not get away with this.

Thursday, June 24, 2010

John Miller: WTF?! Why did you say you're not leaving?!!!

Amidst various reports of sex scandals, bullying, bankruptcies of small Pinoy entrepreneurs, beleaguered banks (from the bankruptcies), predatory pricing and anti-trust practices from different sectors regarding our favorite imperialistic trans-national corporation (TNC), Nestle, the top broadsheets have reported that according to Nestle Philippines chairman and CEO, John Miller, Nestle is here to stay.

*Insert favorite expletive here*!!!! Damn! Double Damn!!

A common defense of used by TNCs such as Nestle in spite of their highly imperialistic practices is to try to hold a developing country's balls by threatening, subtly or otherwise, that they will be stopping or withdrawing their purported investments in that particular country. Sometimes, it works; most of the time, though, it does not, most especially for our favorite TNC. In fact, these TNCs should be encouraged to leave! Here's why:

1. Nestle is one of the primary causes of inflation. Insiders in their marketing department have said that they have been encouraged by their mother company to incorporate as many price increases in their brands as possible. Look at Nescafe, a rough computation of the price index in 2001 versus 2010 reveals that the prices have grown to as much as 70% depending on the variant! Compare this to a developed country where the price increase is as low as 4% to a high 14% in the same period. Consider also the supply side of coffee. It is widely documented that in Vietnam, one of the world's largest producers (if not the largest already), farmers have even resulted to destroying some of their produce as their over supply has caused prices to drop! Supply cost has been low at most times yet price increases continue to hound our poor country. All of this, of course, is at the name of profit! Geesh! Talk about squeezing blood from a stone!!! Our poor country is a victim of this TNC's greed. Damn! Double damn!

2. Nestle's products are commodities. Coffee, milk, non-dairy creamer, chocolate are products that are easily replaceable by a competent manufacturer and there is no glut of these! San Miguel, URC, Alaska, Kopiko, Columbia, etc. can easily fill up a purported vacuum that Nestle insiders claim they will leave. The other manufacturers, I bet, were so unhappy about John Miller's announcement today.

3. The economic impact of the loss of exports are mitigated. A third of Nestle Philippines sales (est. PhP30 Billion) are exports to other countries and they are saying that leaving will have a tremendous negative impact in our economy. Hogwash! I say this for several reasons: a. They export their products ONLY to fellow subsidiaries and revenues are posted as merely accounting entries and not actual cash to the country. b. If indeed there was cash remitted to the country, it stays here for just a short while and is then traded in other markets or remitted to the mother company. The company maintains just enough working capital that it needs and places the excess cash to instruments that make more in its idle state! Guess what? The Philippines does not have high paying instruments compared to the rest of the world. So, no the loss of exports are mitigated because they were NEVER HERE IN THE FIRST PLACE.

It should now be clear why Nestle should leave. Our country will not be beholden to arrogant ASSHOLES like you, John Miller. You can fool some people all the time. You can fool all people some of the time. But you can never fool all people all the time.

Sunday, April 18, 2010

Repost from Green Peace April 15, 2010: Activists 'drop' in to Nestlé shareholder meeting

Please visit link here

LAUSANNE, Switzerland — Thirty activist 'orang-utans' greeted shareholders as they arrived for Nestle's Annual General Meeting today asking them to give Indonesia's rainforests a break and stop profiting from destroying rainforest, threatening biodiversity and accelerating climate change.

Inside the meeting itself Greenpeace activists dropped from the ceiling and unfurled two large banners directly over the heads of shareholders. We want shareholders to use their influence to change Nestle's policies and stop using palm oil and pulp and paper products from destroyed rainforests and carbon-rich peatlands.

Since the launch of our Kit Kat campaign (March 17th), 200,000 people have sent e-mails to Nestlé and hundreds have called them. Today hundreds more are addressing them and their shareholders online - we invited Nestle shareholders to receive messages during the AGM directly from online supporters of our campaign by visiting - where they will also be able to watch the Kit Kat video that launched the campaign and has now been viewed over 1.3 million times.

Our International Head of Forests Campaigns, Pat Vendetti, made a short address directly to shareholders. He urged them to ensure that Nestle stop purchasing products from rainforest destruction. The company is not only driving climate change and biodiversity loss if it continues, but it is also damaging its corporate reputation.

Earlier in the day German activists gathered at Nestle's headquarters in Frankfurt where they erected a 'Twitter wall' displaying tweets from online supporters at Nestle employees as they arrived for work.

Following the launch of the Kit Kat campaign, Nestle publicly announced that it would cancel its direct contracts with Indonesia's biggest palm oil supplier, Sinar Mas, because it has a long history of environmental abuse. These cancellations did not really give the rainforests a break, because Nestle continues to use Sinar Mas palm oil, as well as Sinar Mas pulp and paper products, via other suppliers like Cargill and Asia Pulp and Paper (APP), a subsidiary of Sinar Mas.

Each day that Nestle allows Sinar Mas products in it's supply chain, it links itself to the rampant destruction of Indonesia's rainforests and peatlands. Today we have published new satellite and photographic evidence showing that Sinar Mas continued to destroy peatlands and other conserved areas in Indonesia despite making a commitment in February to stop. Nestle is condoning this destruction by not acting immediately to remove all Sinar Mas products from its supply chains.

Deforestation is a major cause of climate change. It is so rampant in Indonesia that the country is the world's third largest greenhouse gas emitter. To avert catastrophic climate change we must end deforestation - to begin with we need an immediate moratorium on destroying Indonesia's rainforests and carbon-rich peatlands.

For similar reports, you can visit other sites:


Monday, March 22, 2010

Repost from Domini Torrevillas, Philippine Star 3/13/10

A lesson plan for DTI

As of the latest, and most likely last, Cabinet reshuffle, Secretary of Education Jesli Lapus will be moving to the Department of Trade and Industry (DTI) by the end of the month. I’d like to express my congratulations to Lapus for accepting the position. A three-term congressman before being named secretary of education, he previously earned his stripes as the chief executive officer of the Landbank of the Philippines, transforming it from a medium-sized development bank to the premiere state bank of its time.

Holding a doctorate in public administration, a master of business administration (MBA) from the Asian Institute of Management (AIM), and a post-graduate of Harvard University, Lapus first joined the government service in 1987 as undersecretary of the Department of the Agrarian Reform.  

Having held top executive positions in some of the largest manufacturing companies in the country, Lapus presents the most credible and capable choice for DTI head, aside from incumbent Trade Secretary Peter Favila.

Since the announcement, Lapus has been lauded by the business community, with highly-respected Philippine Chamber of Commerce and Industry Chairman Donald Dee welcoming him to the position; Executive Director Rob Sears of the American Chamber of Commerce of the Philippines (AmCham) has also given Lapus high marks for his unblemished reputation and intimate understanding of business. Hailed by Sears as being “pro-business,” the onus now lies on Lapus to inspire investors and businessmen alike to achieve greater things with our economy.

From the stands, it seems that the route of localization is the best trail if Lapus wants to make an immediate impact at the helm of DTI. Instead of following the worldwide trend of overextended economies, a logical course of action would be to turn inwards to another economic and cultural exchange, hinged on Small and Medium Enterprises (SMEs). These localization efforts entail increased attention to the tangible, the interpersonal, and the community; direct connections with SMEs and ties with businesses will surely prove useful for Lapus in the following months.

A turn to local business would necessarily move Lapus to ensure the protection of SMEs from unfair trade practices perpetuated by multinational companies that enjoy monopolies, which is a goal perfectly in line with Senate Bill No. 3099, or the Anti-Trust Act of the Philippines. As penned by Sen. Miriam Santiago-Defensor, the Act prohibits monopolies when public interest so requires it.

Presently, developed countries use anti-trust regulation to maintain healthy competition and promote an efficient working market economy; the circular flow of income between producers and consumers in these countries is, for the most part, uninterrupted by unscrupulous practices such as pressuring distributors and other SMEs to continually meet and exceed aggressive sales targets while simultaneously downsizing marketing and promotional support. In the Philippines however, there have been numerous instances of this exact behavior by multinationals forcing their distributors to close up shop, using bullying tactics and pointless mediation.

A well known multinational, for instance, makes it a habit to pass on non-performing accounts onto their distributors and insist that they deal with the problem instead. The same company has been known to cut off their in-house financing for distributors, leaving them to suddenly deal with the higher rates of a third-party bank. Combined with unreasonable quotas and the constant threat of termination, these distributors have no other recourse but to bite the bullet.

While SB 3099 and a slew of other bills on competition law are in enforcement limbo, the often-overlooked yet fully-empowered Ministry Order (MO) No. 69, Series of 1983, puts Lapus at the head of the crusade against unfair practices such as the ones described above.

MO 69 covers everything from price tags to monopolies and unfair competition. As a consumer — but a Filipino foremost — I urge Lapus to see the good he can do in his new position. He can put a stop to our SMEs being trampled under the feet of multinational giants, and maybe even spur our ailing economy to pull itself up by the bootstraps.

I for one am quite excited to see what Lapus has in store for us. If his record at the Department of Education is any indication, the DTI will become yet another feather in his very capable cap.

Sunday, March 21, 2010

Repost from Ducky Paredes 3/12/10 Malaya: 10 Commandments of Fair Trade

I HAD been a distributor of San Miguel Beer and, presently, of Coca-Cola, both of which treat their distributors as true business partners. It is not always that way between multi-national companies (MNC) and their dealers.

Following is from a friend who had a bitter experience with a big, bad MNC, which continues operating and continues to mistreat and even abuse treat its business partners in the worst way. I have written about it several times. I find his contribution to this column interesting

Being familiar with the business model and the roles and expectations of both the multinational and the distributor, he wrote the following Ten Commandments of Fair Trade, as a guide to MNC on how not to treat their business partners:

Commandment One: Thou shall not use the bait of initial support. Bad MNC is notorious for promising marketing and promotional support to their distributors, as well as favorable in-house financing rates. A few months later, however, all support disappears into thin air. Furthermore, distributors are suddenly endorsed to a third-party bank for their financing (without prior notice), saddled with rates much higher than agreed upon.

Commandment Two: Thou shall not impose unreasonable quotas under the constant threat of termination. Bad MNC has been known to force distributors to sell at a loss, just to meet quotas. Is that how a "partnership" works?

Commandment Three: Thou shall not pull out thy products from the market without any explanation. One fine day, distributors of bad MNC were shocked to learn that batches of a certain milk product were being recalled. No explanation nor prior warning was given.

Commandment Four: Thou shall not instigate and fuel a price war. A near-scandal broke out among bad MNCs Central Luzon distributors when they found out that one dealer was being given ridiculously high discounts, and subsequently underselling counterpart distributors from Metro Manila. Obviously, Manila distributors were forced to lower their prices, but because the discounts were so unbelievable, many were forced to close. It turns out that the "discounts" was part of a scam perpetrated by bad MNC’s Regional Sales Manager, who has since fled with the money and gone into hiding. Oops.

Commandment Five: Thou shall share thy profit evenly. If distributors are working to the bone making the business earn, and yet are still at a net loss after five years of operation, something is wrong.

Commandment Six: Thou shall not condone tax evasion. Distributors of bad MNC pointed out that if they pay the local tax of one percent on gross sales imposed by cities, they would operate at a loss. Bad MNCs reply? Fine, don’t pay the tax.

Commandment Seven: Thou shall not deliberately delay lawful reimbursements. Bad MNC has a very effective – albeit crooked – way of dealing with the valid complaints of its distributors. They delay the reimbursements for months on end, thus crippling the distributor’s cash flow.

Commandment Eight: Thou shall not "hand over the empty bag". Whenever bad MNC has a problem account, or a buyer whose payment habits are terrible, they just pass these on to their distributors. These problem accounts suddenly become the distributor’s dilemma. Nice, right?

Commandment Nine: Thou shall not tolerate any conflict of interest cases, under any circumstances. The DTI is currently investigating a situation wherein bad MNC allowed yet another one of their regional sales managers to have an illicit affair with the managing officer of one of its distributors. Despite numerous parties repeatedly calling their attention about the matter, bad MNC took a hands-off policy. In a way, they actually encouraged the affair, since the distributor was achieving record sales. It was soon discovered that the numbers were padded, ghost deliveries were being made, and the unfaithful couple were all behind it.

Commandment Ten: Thou shall not ignore nor disrespect the proper authorities. The Department of Trade and Industry (DTI) has the power to enforce grave sanctions on a company for violating any of the commandments written above. They have full authority on the matter thanks to Ministry Order (MO) 69. MNCs cannot assume that they can get away with bullying Filipino entrepreneurs just because they are big.

The DTI does have the teeth with which to to bite the bad MNG back. Now, if only Jesli Lapus, the new DTI head, would only do something about this.

Thursday, February 25, 2010

Milk Code in the Philippines: Quo Vadis, Nestle?

When an entity publicly espouses certain universal values, it is reasonable to expect that the entity -no matter what kind of situation it is in - will abide by its own espoused values. However, if you look at the way Nestle is handling itself in the Philippines, especially in its hypocritical and bullying treatment of its third party "partners," it is fairly obvious that its values - Honesty, Integrity and Fairness - are just mere lip service. (Please look at the historical posts to see for yourself how this is so.)
If it is unique, "one-of" case then one can reasonably conclude that it a mere aberration; and therefore, the reputation of Nestle, most especially in the Philippines, should remain intact and fairly unblemished. On the other hand, if it is proven that such behavior is habitual, then it reflects badly on how twisted the leadership behind the organization is. As much as we try not to think of it negatively, it is with extreme sadness to conclude that Nestle falls into the category of the latter.

Apart from its trade bullying and its blatant disregard for its former workers, Nestle, by its own words, is extremely guilty and hypocritical in its stand on the international milk code. Consider their own words when you make your judgement on how seriously fucked up this company is:

Philippine Daily Inquirer, 11/21/2006:

Nestlé position

In a statement, Nestlé

Philippines Inc. said it was supporting the proposal to prohibit the use of identical or

similar brand names both for infant formulas and for other milk products not covered by the Milk Code.

“The proposal will strengthen the effective and transparent

enforcement of the ban on the advertising of infant milk,” Nestlé said yesterday in a statement.

The company said it was also supporting an advertising ban on breast milk

substitutes for infants aged up to 12 months. In contrast, the IRR regulates the

advertising of milk formula for children aged up to 24 months, which is consistent with the World

Health Assembly resolutions and the Infant and Young Child Feeding Convention to which the

Philippines is a signatory.

The International Baby Food Action Network (IBFAN) in Europe, representing 58 groups

in 35 countries across the continent, endorsed the petition supporting the Philippine government’s policy on infant formula.

From England, a certain Jennifer wrote: “The health of

children of the Philippines is of far greater importance than the accumulation of profits by baby milk companies.

“It is shameful that com

panies and individuals should undermine the health of babies purely to make money.”

Please click HERE for the full article.

In their own website for baby milk,

however, here is Nestle's global statement:

However, it appears that most of the allegations about Nestlé

are practices that are entirely in keeping with the International Code, as originally drafted and as implemented by

each government in question. It is important to note in this context that the Code was passed as a recommendation to

governments to implement according to their own legislative and regulatory frameworks.

Nestlé voluntarily and unilaterally applies the Code in its entirety in all developing countries (over 150 nations).

Please click HERE for the full article.

WOW! If this isn't hypocrisy at its best, then what is? It is clearly no wonder why the other issues are

present and there to stay. There is no value (pun intended!) to the word, written or otherwise, in the Nestle world.

The good news is that FRR believes that people, even bullies,

can change for the better. You can be un-fucked up if you put the will behind it.

Nestle, quo vadis?